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MuniMae raises $66.1 million


Municipal Mortgage & Equity LLC, the Baltimore-based investment firm known as MuniMae, raised more than $66 million yesterday in its latest stock offering, earmarking the proceeds for future growth, the company said.

"While we raised the money now, we did this for the long-term [growth] of the company," said Mark K. Joseph, MuniMae's chairman and chief executive officer. "Given today's uncertain economic and geopolitic environment, we're thrilled" at the high demand for the shares.

MuniMae originates, services and manages stock and bond assets that relate to the apartment-housing marketplace - both for its own account, and for the accounts of clients.

Since its 1996 listing as a public company, MuniMae has conducted five follow-on stock offerings, Joseph said. In yesterday's deal, the company sold 2.8 million shares of its common stock to investors at a price of $23.60 each, raising $66.1 million.

After the fees and other expenses are paid, MuniMae stands to net $62.3 million. However, that total could increase to $71.6 million if an over-subscription provision is exercised, which the company is optimistic will happen. The proceeds will be used to retire some debt and make new investments to fuel growth, Joseph said.

MuniMae is organized as a limited-liability company, which allows it to take the income generated from its tax-free investments and "pass through" that money to investors - also on a tax-free basis.

Since about 85 percent of MuniMae's dividend is free of taxes, an investor in the top tax bracket would have to find a taxable investment with a yield of about 11.5 percent to end up with the same amount of money in pocket after taxes are paid, MuniMae said.

From the time of their initial listing in late 1996 until the start of this year, MuniMae's shares have generated an average annual total return of about 17 percent, the firm's calculations show.

Fueled in part by the proceeds of stock offerings like the one yesterday - as well as proceeds from other investments - MuniMae has seen its assets under management grow from $298 million at the end of 1996 to $3.4 billion at the end of the third quarter, the most recent financial results posted by the company.

MuniMae plans to hold a conference call Feb. 28 at 9 a.m. to discuss its fourth-quarter and year-end financial results.

"We are very, very pleased" by the results of the stock offering, Joseph said.

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